Know Your Numbers It's just as important in business as it was in elementary school.
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If you're a typical entrepreneur, you likely have the confidence, intelligence and ambition to implement and execute your business plan. And if you have all those qualities--plus one more essential ingredient--then you have an excellent shot at business success. The problem is, this one critical ingredient often gets the least attention. So what is this all-important ingredient? Having a complete understanding of the numbers that drive your business.
Entrepreneurs are, by nature, focused and driven. They're focused on the next product and the next sale, yet when asked what last month's revenues were, or what accounts receivable are today, they may only have a foggy notion at best--even though the financials are the tools that help manage successful business ventures over the long haul.
For example, consider the emerging company with sales growing at 10 to 15 percent every month. The company is profitable, but never seems to have enough cash. A common error in this situation is to continue ignoring the numbers, and ultimately the business fails because it's strangled for cash.